AEM - CGS-CIMB Research 2022-08-15: What Happens In FY24F?

AEM - What Happens In FY24F?

  • AEM (SGX:AWX)'s 1H22 revenue rose 181% y-o-y to S$540.5m driven by the volume ramp up for its new generation System Level Test Handlers, Burn-In Test Handlers and the consolidation of its CEI acquisition. 1H22 net profit jumped 180% y-o-y to S$82.8m and was 3% above our S$80.4m forecast. 1H22 net profit formed 70% of our/Bloomberg consensus full-year forecast.
  • Gross profit margin fell 3% points y-o-y from 34% in 1H21 to 31% in 1H22 due to increased cost pressure from supply chain challenges. Legal costs spiked from S$3.4m in 1H21 to S$10.8m in 1H22 due to an ongoing confidential arbitration. Removing legal costs, 1H22 PBT margin was 20.9% in 1H22 vs 20.2% in 1H21.
  • An interim dvidend of S$0.067 (25% payout policy) was declared.
  • AEM revised its FY22F revenue guidance from S$700m-750m previously to S$750m- 800m and guided that it expects 2H22F revenue to be lower than 1H22.
  • On new customer wins, AEM also announced that it was recently selected as a supplier for a leading High-Performance Computing (HPC)/Artificial Intelligence (AI) company and consequently, received orders for its customised test handling solutions and another customer that supplies chips used in mobile applications. AEM also acquired an initial 53.3% stake in a South Korean company, Nestek Korea Co Ltd (Unlisted) that specialises in the design and manufacture of pins and sockets.
  • We raise our FY22-24F earnings per share forecast for AEM slightly by 0.2-0.3% as we think higher operating costs many be required to support our increased revenue forecasts. We reiterate our ADD call on AEM with a target price of S$6.54, based on 14.9x (2 standard deviation above its Jan 17 to Aug 22 average forward P/E multiple, vs 15.62x previously) our FY23F EPS forecast of S$0.44.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

William TNG CFA CGS-CIMB Research | 2022-08-15
SGX Stock Analyst Report ADD MAINTAIN ADD 6.54 DOWN 6.850

Previous report by CGS-CIMB:
2022-06-16 AEM - Adding Capacity For Growth

Target prices by 2 other brokers at AEM Target Prices.
Listing of broker reports at AEM Analyst Report.

Relevant links:
AEM Share Price History,
AEM Announcements,
AEM Dividends & Corp Actions,
AEM News Articles


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